 That worked come on up front folks. We've got lots of lots of room The coffee is going to be there all morning, so you'll you'll have a chance to get back and But we do want to take advantage of the fact. We clearly have critical mass, so we've got a so we do want to get started Thank you all for coming. I'm I'm delighted you're here. My name is John. Hammery. I'm the president at CSIS and This is a little different for us today. We've Normally We do big public events like this when we're done with a with a study and we're not done with this study We've actually decided to you know depart from our normal practice a little bit and take Take a study in front of an audience at a stage when we think we know where we're heading But we still are looking for the kind of input and review that That we need from all of you. So frankly, you're all here to work today You're here to help us think through identify discuss the issues inside this report We we're going to need that as we take this thing the next step. So I want to say a Sincere, thank you to you I'm going to I have not been involved in writing the report so I'm free to say things okay because it's And I would like to offer a few just personal observations This morning that I hope are not unrelated to the report but probably go a little bit further than we do with the report Let me let me introduce this by sharing a little a little story I was I was up. I was the deputy secretary of defense at the time when we went through a paranoid process that led us to shut down relations with China on on space launches and Had lots of very somewhat painful Experiences up on Capitol Hill, you know, and so we that climate that existed at that time well about two months after I left and I came Here to CSIS I was invited to a dinner with Over at the National Academy of Sciences and the reason is one of the people in our orbit was being inducted as lifetime honoree into the Academy and the another individual at night was the head of the Chinese Academy of Sciences and Just as things were luck would have it. I was seated next to this guy's wife The Chinese guy's wife and he she didn't speak English. We had an interpreter and so we were struggling through you know How to make conversation and but I did learn During the conversation that she was the lead designer on the long Long March ICBM. Oh boy You know, I've just been deputy secretary. That's we better change the subject here, you know And so I said well, how long are you going to be here in the United States and she said oh, we'll be here for a month a month Yeah, she said we're gonna be here month. Where are you going? She said we're going to Detroit Detroit for a month. I mean You know what in the world and she said yeah, she said our son's a lead designer for Ford Motor Company You know, I thought to myself, you know, this is a little different than the world. I had been living in that where we have such a deep paranoia about The Chinese on security grounds and then find the lead designer for the ICBM that we think has a nuclear warhead on it aimed at us Her son lives in Detroit Okay, this is a more complicated world and I I bring this up to say that You know, I spent 25 years In government working on national security issues and I a lot of them working for senator Warner and I To my day, I'll go to the grave wanting to defend this country, but we do not have a very sophisticated Approach to industrial security and technology security. Matter of fact, we have a very inadequate approach We have a very static approach as though we can freeze in time A set of technologies and they won't change because of our political preferences And we don't and it does failed. I tell you what we what did we do? I mean, we now have the most reliable Space booster for commercial launches is in China and yet we thought we were going to freeze them out So they could never move forward if we wouldn't work with them Was that an intelligent security strategy You know, I noticed when when I was in government we went through We would we were going through a painful discussion about about letting American Satellite manufacturers imagery satellites Put up commercial satellites and we said well, we're not going to give you a license Until you can prove that your competitors are going to be doing just about the same thing well, you know, what sense did that make we in essence Used regulation to guarantee a protected market to other countries before we'd let our companies compete You know, is that a Sensible security strategy. I mean, it's it's as though our political preferences Can control the evolution of technology? That's just crazy Because we have this very static view of industrial security You know when we put in place the ground rules You know for today's industrial security it was back in the 1950s And it was a very important part of the strategy to win the Cold War. I have no complaints about that but back then You know because of the constraints of technology your engineers had to be close to the factories So that you could work out the problem So you could put in place a security system that was grounded on geographical borders You could do it back then But that's not today. I mean today we're designing things on a global basis So think about What we're doing we We put a hundred percent inspection requirements on anybody that comes from china We put a two percent inspection requirement on containers That come from china and a zero percent inspection on electrons I mean our paranoia is creating an incentive to move jobs to china And again because we haven't updated our thinking we have these very obsolete Ideas about security. We have this idea that security is static. We can freeze it Well, you can't we've got to develop a much more dynamic approach so When we started this and I said to david in the team and again i'm This is this is me talking here. So don't blame them for all what i'm saying here today but This is part of a broader fabric A much bigger fabric of how do we design Viable security structures In the 21st century when you have such ease of movement of ideas and things and electrons and money All of this can move so easily today and there's so much talent other places It isn't like it was in 1952 when 70 percent of the gdp of the world was in this country It's not like that anymore. So we'd now have to design security systems That work in this age Not just carry over old models from the past So the study that you're looking at and you got to as I say you got to help us here today We've outlined four different alternatives And part of what we want to do today is to hear your thinking about this How what what is the dynamic beyond our study group, you know, so we're getting the input from people around the community At the at the foundation still and senator warner dedicated his entire Lifetime and is still does to securing this country But it is having a far more dynamic concept of security than we have had And that's what we've got to do with the conference today. So david, let me let me get off the stage and to say Thank you all for coming. I'm delighted to have you here. I think we've got a very important opportunity in front of us as I said, we're about 70 percent through this We're at that stage. Like I said, we don't normally do this. We don't normally Take it to this stage and then invite the broad critique But we think it's important to do it right now and you're going to be part of that Thank you all for being here. Glad you're here Pardon me while I move this mouse Not connected to anything so it might give me the illusion of control that I I want to thank you all for coming obviously I would recommend that if you have a device that makes noise inadvertently like a cell phone That you either turn it off or turn it up really loud so that we'll know who to blame when it goes off And I've tried to do that with mine I want to open up with a short story Almost 30 years ago. I was coming out of graduate school and I was being recruited Among others by the Johnson Space Center and NASA to go to work there And I was invited to drive to houston. I was doing my graduate work in austin And be present in the command center for the first shuttle launch So I arranged to do that. I think I spent 27 dollars for a motel room Which on a graduate student salary seemed like a lot of money at the time And and got up early in the morning Got through security got in and of course those of you who remember will know that that launch was scrubbed And and so it was a real signal of two very very important things One was that the government was about to fundamentally change the nature of the launch business And the second was that you couldn't count on it And uh as it turns out I didn't go to nasa I'm sure that that event had nothing to do with my decision Instead I went to do d and I got involved in industrial based business And today I feel like I'm almost right back where I was nearly 30 years ago As dr. Hamry said today we we are doing something that's a bit unusual for csis releasing a draft report for broad public comment While our analysis is still ongoing And we're here this morning first to walk you through That whole process To describe our next steps to distribute a copy of that draft report to you And then to take your questions. So what I want to do is get started. Hopefully I'll answer a number of your questions Before you actually have to ask them. Uh, can I have the next chart? Everybody can hear okay I guess if you can't I'm not quite sure how I would know But uh anyway, this is uh, this is what our draft report does It describes the importance of the commercial space sector broadly to us national security It catalogs a number of principal concerns about commercial access to space, which is the launch site of it It lays out a series of options to address those concerns And it gives you the framework that we've established for analyzing those options What it does not do is present the results of our analyses because in fact, that's still ongoing So as a result, we have elements of this report that you might call findings Although we actually don't call them findings yet But we really don't have elements yet that could be called recommendations Although you can see from dr. Hamry's comments that we might occasionally be leaning in a direction that would Would illuminate that Why we're doing it this way? Well, I'm going to touch on a few reasons as we go through this So first, let me describe our methodology next chart It says all of our reports are Attempts to be an independent and objective assessment And and ultimately we want a final report which does go out for public release It builds on the work we did three years ago that was released in a report in february of 2008 On the health of the u.s. Space industrial base and the impact of export controls And i'll talk a little bit more about that study We collected a lot of information through extensive interviews. They were all done off the record and not for attribution I won't tell you whether anybody in this room Was participated in that process But but we'll continue to do those and we looked at virtually all the data that we could find or had our arms around We focused on launch Of medium to heavy payloads to geosynchronous orbit because that's the real driver of both the the overall dynamic and of the industrial base And of course we have the new approach of the Draft for comment. So let me I mentioned that we started our starting point was actually our 2008 study Let me quickly go back a little bit to that study next chart You can't read this and and that's fine. You can find the the report on our website It's a briefing and actually this particular chart takes like five charts in the in the briefing So you can go through it, but these are the findings Um, and you can you can as I said find that on our website But overall let me just highlight three key findings one We found that space is obviously critical to national security and the economy. That's no surprise to anybody Second that all of the segments of the u.s. Space community are highly interdependent military Intel civil and commercial But that sometimes that interdependency is recognized by lip service But not universally by integrated actions across all of those sectors And finally that the u.s. Needs access to technologies, but that increasingly those technologies are not coming from the us That led us in the 2008 study to an extensive focus on export controls, which is not where we started We started purely looking at the industrial base And you'll see that throughout the issues in that report You'll also see it a bit in the draft today and of course that issue is back on the table again I was talking with some in the audience beforehand about how these topics tend to follow a sign wave right there are times when Everybody's paying attention to it and then they kind of drop off and you wonder what happened and then they come back again And we're clearly on the upside of such a wave right now next chart We also had a number of recommendations that tried to address the concerns that were underlying those findings And and and actually the government has undertaken to implement a number of these recommendations It's not our our charter to date to try to report on that But it's it's quite rewarding obviously when you're in a position such as we are and our our charter is to help Provide analytical input to important public policy issues and help move them forward And you see that those are actually received on the other end It it makes it easier to to get up in the middle of the night and come to work But it was clear to us that more was needed And that's one reason why we undertook this review of commercial space launch at this time Let me have the next chart There's a second reason as I mentioned the sign wave effect It seems like everybody's doing a review right now. There's a huge number of ongoing or recent completed studies and reports Um, here's a partial list of the white house's, uh, uh, national space policy Under being written today, uh, the ongoing space posture view dod. We had an interim report out, uh In march last month a final report coming out at a date Which as far as I can tell is still to be determined Um, so part of the reason we scheduled this public release Is in fact because of the timetable and schedule of these ongoing Activities inside and across the federal government And our desire to fulfill our responsibilities to contribute where we can to those rather than wait until they're finished And then we come along and follow behind and and critique them But there's a third reason we undertook this next chart And that's because actually it matters Um, so it's not just timing and it's not just follow on it's actually pretty important We call this chart two reasons why policy makers should care, but it's really our preliminary findings Our overarching finding is that we concluded That national security depends upon commercial assets in space And that's widely recognized But that current implementation of the policy of assured access to space Does not adequately recognize or deal with that dependency That's a critical fundamental articulation And we actually had trouble finding it articulated that way in any existing policy statement You got plenty on commentary on the policy of assured access to space Plenty of recognition of the dependence on commercial assets For that for that policy But inadequate consideration of what it means of how we need to operate And reflecting that overarching finding I think our discussions and our data analysis Yielded in addition seven areas of concern next chart This kind of lays them out we give a lot more detail on each of these in the draft report Limited access to u.s launch for commercial satellites. There's actually been one commercial satellite launch In the u.s in recent memory and none on the current manifest We call that limited you could actually use a stronger word than limited Uncertain access potentially to uh to international launch providers things do get in the way Um a pretty fragile u.s launch industrial base, especially when you get down to second and third tier Suppliers where in many cases we have a critical technology and we're down to a single supplier and potentially a vulnerable one Increase in prices Not quite as clear. There's an increase in cost This actually is an interesting question Issues around payload security And uh whether we can assure that for the future given developments in uh detection and cyber The potential consideration of a real catastrophic event or even a combination of catastrophic events I was down in pascagoula miss sippy and I watched what a 30 foot wall of water did to engle shipyard And I think what a 30 foot wall of water would do To cape canaveral and it would take more than a day to get anything back Plus, of course the catastrophic failure of a of a launch launch vehicle And then on top of that you could look at each of those concerns and say well, it's not so bad today But you also have to look at the long-term implications and where that might go And if the policies don't change, let me have the next chart So here's the structure of our study The first part talks about the overarching finding the relevance of of commercial space to national security The second looks at the current state of the market The third is really kind of the heart of our report We and I'll go through each of these in more detail So we're not going to cover a lot now and that is a series of or sets of options For addressing the concerns or improving access The fourth part is the criteria that we'll use for evaluating those options and the fifth is is our next steps Let me have the next chart. I apologize for the heat in the room You're welcome to take off your jackets And momentarily I may do the same Since this is not being done for prime time I think we may the weather may be changing faster than our hVAC can accommodate When you go from 32 yesterday to 80 today, it's a little bit troubling So this is the first part we've discussed our finding already that commercial space assets are critical to national security And and we found a fairly widespread thought though that somehow those assets are just going to be there when we need them And that the government actually has limited responsibility for or even need for awareness of that And look at the demand today just for bandwidth from commercial communication satellites Roughly 80 of doD's use is off of commercial assets And in theater oef and oif It's reported in the open media as as high as 93 to 96 And frankly there's no intention by the government to go back to relying on solely government assets for those purposes That's a widely recognized and potentially stateable reality But Make no mistake about it The access to what we're using today over iraq over afghanistan Was neither carefully planned for nor deliberately made sure of We were able to take advantage of the opportunity that was provided and we certainly have So that's an important element as we stand here And in addition, of course as I commented earlier the sectors of space are interdependent Let me have the next chart. This is just a representation of that Of the of the civil and defense and intelligence and commercial and the key part obviously is the middle The common intersection of all of them and we list some of the characteristics of of assets and capabilities that are Co-located inside that that intersection area First of course is launched second communications on down the list Including industrial base and technology. This chart's in the draft report. You'll be able to look at there So if national security depends upon commercial space assets, but doesn't fully recognize a responsibility for launching those assets What does that mean? Well to answer that we started by looking at the current state of the commercial industry next chart Part two of our study gives a lot of detail not only on the market us and globally but also on the federal policies and regulations and statutes that affect that market So let me just highlight a couple of points next chart The bottom half of this chart is geosynchronous orbit satellites You can see both the left hand side, which is history the right hand side, which is projections It's been staying around 15 launches per year ranging 10 to 20 And it's projected to stay in that range for the next decade next chart But the second factor is that the us share of that market is declining From over 60 percent in 1997 and 1998 to 30 percent today. This only goes through 2008 It doesn't reflect the financial crisis 2009 those data are not fully Absorbed yet. I suspect when we get the 2009 data that trend will not have changed That trend line will continue to go down next chart Because here you see the same declining share and you can't really read the numbers But I just call your attention on the left side. The us is the big blue 75 percent And on the right side, uh, it's 25 percent and still declining So if us national security and the economy depend on commercial space assets And the us role in the global market is declining And the government is under recognizing that situation or its roles in addressing it What are the options next chart? That's our third part of the study We looked across the band of options that we found someone inside the government or nearby Had put on the table for consideration as a way of dealing either with this issue directly or There was a tangential impact on these issues from those options and we arrayed those options into four sets We did that for three reasons one is we want to evaluate those options against a common set of evaluation criteria And see what elements of each one make sense The second is we're putting them out now to you and the broader community To make sure we're not missing something or mischaracterizing something And the third is we want to make sure that the ongoing studies underway today Are aware that there are multiple options available And they don't rush to conclusions and decisions on the more narrow option set that each one of them might be looking at Because if you don't know all your options, you're likely to pick whatever's handy rather than whatever's best Next chart These are the four sets of options Leveraging foreign launch providers through partnerships through changes in government policies Encouraging competition Which requires a number of changes inside the us as well as a potentially interaction globally The opposite of increasing competition, which is increasing the government role Essentially instead of competition have the government do more and then Lastly changing the dynamic by changing the demand None of these are particularly easy. They're all fraught with peril And the report has quite a bit of detail on on each of these I'll be glad to go through them in more detail in the question and answer period next chart So the final element of our analysis part four of the report Was to lay out the criteria for assessing and evaluating those option sets and they cover five areas next chart Reliability security affordability Feasibility and timeliness So our draft report defines each of these in detail describes Sub elements of evaluation. So you'll actually see what we're measuring against These are not hypothetical or ideological criteria, but actually analytical ones And it describes how we'll assess the option sets against each of one of these So as with the options, we lay these out in case we're missing something. You'll help us identify and rectify that next chart So what are our next steps? We'll release this report We'll seek comments. We've set up a website. We've sought opportunity for providing input and we will acknowledge And accommodate each of those I suspect We'll divide the comments into the spurious and the serious And what the boundary line is between those will depend on whether we get 10 or 10 million Um, I don't expect 10 million, but I've told my staff and you know, I used to work for the government And so I'm very familiar with the government's approach to uh comments Which is thank you very much For your contribution our we've done a careful assessment and we've concluded that our existing Path completely accommodates all the important elements of your comment Some of you may have been on the receiving or the sending in of a similar message at some point in your career I particularly used to do this with members of congress, but I was much more attempted to be much more subtle I suspect it did not come across that way But meanwhile and so we're going to be open for comments and and obviously For the significant issues that come up We look forward to meeting with people to go on through detail Acquiring more information instead of wherever possible or useful And meanwhile, we're going to continue our fact finding and our analysis evaluating the options refining as needed Meet with those who have more to offer and put out a final report by the end of june next chart Here's the address for the comments of the report will be on the web at the conclusion of this It may already be on the web if anybody's got a wireless connection. You can Check and see And and so we'll be ready to go at this point. I would like to acknowledge The contribution that the the folks on my team who made this possible The ones both in the room And not And I I'd like you actually if you all would stand up when I call your name Because I really want to call you out on this and an acknowledgement kind of way It also let me see who's not here Yeah, I teach school in my spare time and I like to find subtle ways to take role rather than make it obvious No, no, I seriously the amount of effort and the the contributions the team made on this report And I'm sure I'll overlook somebody in this process. It was just phenomenal We've been at a very hard run for four months on this and and I've covered an awful lot of territory quite thoroughly so Tara Callahan Lindsay omen you can go ahead and stand up with your laptop or wave your hand. Tom Patterson Greg sanders Greg is here. That means it's on the web, right? Great Stephanie sanoc Gary Powell brian green josh hartman And of course my deputy director at the defense industrial initiatives group guy benari. He's not here today. He's actually headed out to Seattle to do an industrial plant tour and Most importantly my co-project director who will join me up on stages here afterwards for the questions greg kiley I would Like to extend my personal. Thanks to all of you for your contribution here I wouldn't be up here today. If not for the work you've done So that concludes our presentation. Here's how we'd like to proceed. We have copies of this draft report available What I'd like to do is take a break. Let you get your own copy. I think they're right outside. Tara. Is that right? I would really ask you to take one copy each No, not more than that, please Because uh, otherwise we'll we might run out And uh, and then we'll reconvene and take your questions. So with that, let's take a break and get the report. Thanks